In his press conference this morning, Gordon Brown had a nice line about the Conservatives. He said: ”Novices cannot be trusted with the recovery”. His abuse of statistics throughout the press conference simply screamed: “The prime minister cannot be trusted”.
Here are two examples.
Mr Brown has no clue what he is talking about on efficiency savings. When asked the important question about how Labour’s ill-defined spending cuts would affect people, Mr Brown gave a concrete example of an important efficiency saving he said would come from child benefit. I’ll write the quote out in full so no one is under any doubt about its context.
“Let me give you an example of how it will change for people – child benefit will be paid in the next few years over the internet. People will register for child benefit. They will not get it paid by post. They will not get it paid through a call centre. That itself will save £1bn in the administration of child benefit.”
Rubbish. When Mr Brown said this, my jaw fell to the floor. Anyone who knows even the most minimal thing about the administration of benefits knows that child benefit – a universal payment – is really cheap to administer. It cost £74 million in 2008-09. How can you save £1bn when you only spend £74m, Mr Brown?
Just for completeness, here are the official sources of that information. The exchequer cost of paying child benefit in 2008-09 was £11.2bn HM Revenue and Customs says its administration costs 0.66p for every £1 spent. So, that puts the administration bill in 2008-09 at £0.074bn (or £74 million, or £11.2bn*0.0066).
Mr Brown does not use a correct comparison when a dodgy one is available. Referring to the 0.2 per cent first quarter growth, which he insisted was in line with the Treasury’s forecast, he said:
“£600m extra growth in this quarter; £6bn – ten times that amount – to be taken out by the Conservatives over the next nine months. Tell me if you think that is a risky strategy.”
People can disagree about how risky the Tories’ strategy is, but there is no doubt Mr Brown’s comparison is invalid – because it inflation-adjusts when it should not and because it compared one quarter of growth rather than a whole year. The Treasury expects the economy to grow by £58bn in 2010-11 and the Conservatives want to cut public spending by £6bn.
Maybe Mr Brown meant to say: “£6bn cuts compared with £60bn growth – that’s ten time less”. Or maybe he is really a man of style rather than substance.
